Covering letter to Baroness Hollis, Minister for Child Support (etc)

As we both know, the new CSA scheme commences on 3rd March 2003 for
new, and linked cases. The government intends cases on the current scheme
to be converted later, probably during 2004. Where there is a large change
in liability, the government intends that the change will phase-in over
a number of years. A sensible controlled introduction.

We are also both aware of a potential loophole in the above plan. It
was discussed in the Commons on 10th February, but was already public
knowledge before then. Steve Webb asked what was being done about the
intention of some parents with care to close their case then re-apply
after about 3 months to restart it under the new formula. Andrew Smith
stated that the 13-week period was "precisely calculated to attempt
to close that loophole".

It doesn't come close to closing that loophole, as the enclosed
paper shows. In many cases, exploiting this loophole will yield a profit
to the parent with care even within 2003, and in far more cases within
a year. If a significant number of the third or so of cases where there
is an increase in liability go down this route, it will put unwanted stress
on the CSA and result in publicity that no one should want. Some such
parents with care are known to be attempting this method already, reportedly
on the advice of CSA staff. The news is out.

The government may simply ignore the loophole and hope it will not have
a major impact. It may change the regulation concerned. Another approach
may be to inform non-resident parents that they have the option of applying
themselves to restart their case during the 13-week period to ensure it
continues on the current scheme. It is your choice, of course.

Being childfree, I am not impacted. While I am critical of a number of
aspects of the new scheme, I believe that until it is operating successfully
there will not be an opportunity to address my concerns, so I am as interested
as you are in seeing it working as soon as possible. That is behind my
urgent production and posting of this paper, to you and Doug Smith.

(This haste hasn't given me time to triple-check and polish this paper!)